Bell FX Currency Outlook The Australian Dollar's recent fall has stabilised with the local currency opening trade this morning in the mid 0.9700's.

Australia: The AUD traded to the low 0.9700's on Friday evening but seems to have found a base for the moment around the 97 cent level versus the USD.

With many analysts now predicting the AUD will hit a low of 90 cents by year end and the possibility that the massive quantitative easing policy by the US Federal Reserve may possibly be curtailed later this year, the pressure is likely to weigh upon the AUD.

This is a quiet week for data in Australia although most eyes will try and dissect the RBA minutes, which would be released tomorrow from their meeting earlier this month for hints of any further changes in the official cash rate.

We expect no surprises and the minutes will confirm current interest rate policy is appropriate for the foreseeable future. On Wednesday the Westpac-Melbourne Institute figures for consumer confidence for May will be announced.

The next day we will see the HSBC flash manufacturing PMI data for May from China which can always have an impact on the AUD.

Majors: The USD continued its recent strength on Friday buoyed by better than expected consumer confidence figures for May from the University of Michigan.

The May figure of 83.7 was better than last month's figure of 76.4 and higher than the 77.7 figure expected by the market and the best figure in 6 years. This helped to propel the Dow and S&P500 to another record high.

The NASDAQ which still is below its record close stands at the highest level since 2000. European indices all registered modest gains as well and generally stand at five year highs.

Some ECB officials have discussed that there is scope to further lower the ECB cash rate from its current level of 50bps. Using the term "all options are available" The EUR could come under further pressure in coming weeks.

On Wednesday the Bank of Japan and the Bank of England meet and we expect no major changes in policy from either bank. Fed Chairman Bernanke will also be speaking on Wednesday when the recent minutes from the Fed will also be released. In Canada, financial markets will be closed today for Victoria Day.
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